Common Cause: ALEC should own up to corporate lobbying

Common Cause has teamed up with the law firm Phillips & Cohen to issue a formal complaint to the IRS against the American Legislative Exchange Council, a corporate-legislative organization that’s become a bete noire for progressives. Common Cause says that ALEC abuses its status as a tax-exempt public charity because lobbying accounts for more than 60 percent of its expenditures.

In a conference call Monday afternoon, Common Cause CEO and former Pennsylvania congressman Bob Edgar said, “Legally, for ALEC to claim tax status as a charity, no part of it can be influencing legislation.”

He later said that “every organization has a right to lobby, but not to be tax-deductible.”

ALEC has thousands of members in state governments and 140 member corporations. Through ALEC, corporate members prepare draft bills for state legislatures. The organization also keeps scorecards to track progress on its legislation, sends out alerts to member corporations, and sends talking points to legislators.

Republican state Sen. Owen Johnson of Long Island and Assembly Minority Leader Brian Kolb of Canandaigua are members of ALEC.

To date, ALEC has promoted “Stand Your Ground” gun laws, voter ID measures, and the privatization of schools and prisons. Florida’s Stand Your Ground law has become central to the recent shooting of Trayvon Martin. Because of that and other controversies, companies including Coca-Cola and Kraft Foods have left ALEC, as reported over the weekend by the New York Times.

“ALEC’s defense is that although it may look like lobbying, they also do nonpartisan research and analysis,” said Eric Havian of Phillips & Cohen. However, he added, ALEC does not act as a nonpartisan group and is tax-subsidized through its status as a public charity.

Common Cause has filed a formal complaint with the IRS using a review of ALEC documents.

The complaint can be seen on CC’s website. The vast majority of the documents in the complaint were obtained through an open records request, although others were obtained through an anonymous source.

Phillips & Cohen represents whistleblowers in tax securities and fraud cases. “Our firm has a reputation,” Havian said, “we would have nothing to do with this case if we didn’t think it had very strong merit. We’re not a very ideological law firm; we’re lawyers.”